Military Retirement and Divorce – How Does a Divorce Impact Military Retirement Pay?

A reader writes:

“If my ex husband was active duty for 10 years and 20 years Reserve and he has 5300 retirement points at the rank of O-6, how much will he receive? I will receive 50%.”

After exchanging more e-mail, we learned that her ex-spouse is under the Final Pay retirement system (for those starting their military service before 8 September 1980). He filed for Reserve retirement in 2006 and will turn age 60 in late 2013. When their divorce agreement was mediated it was agreed that she would get 50% of his retirement and “spousal insurance” benefits.

Disclaimer: I’m a fast learner, but I know very little about military benefits for divorced spouses. Military divorce is a complex issue with many of the answers depending on state law and the wording of the divorce decree. Even though I can come up with a slew of numbers to answer the pension question, ex-spouses still have to check their divorce agreement. The decree also has to be filed with the Defense Finance and Accounting Service in order to claim the divorce’s pension payments. If any of this seems confusing or conflicting, it may be due to the extensive differences among state laws. It’s essential to consult a divorce lawyer with experience in military benefits.

Reserve retirement is also nearly as confusing as divorce agreements. Most of my reader questions come from servicemembers, not the spouses. If the servicemembers are confused, then imagine that you’re a military spouse who’s not quite sure how the system works, and you’re not aware of what information sources could help you learn more. If your spouse is hiding the facts during a bitter divorce then the research becomes nearly impossible.

For example, I’m sure millions of veterans have heard of the legendary military retiree who refused his pension so that his ex-spouse would not get her share of it under the Uniformed Servicemembers Former Spouse Protection Act. (One state court eventually handed down a judgment awarding her that amount regardless of whether he was receiving his pension.) A Reserve servicemember could try a similar tactic that’s completely legitimate, although ethically dubious and financially disastrous. Instead of applying for “retired awaiting pay” status, they could elect to be discharged. “Retired awaiting pay” means that at age 60 the pension will start at the max longevity for their rank and at the pay scale in effect when they turn age 60. That’s what 99.9% of Reserve officers choose, but “retired awaiting pay” means that they’re still technically eligible for mobilization.

A discharge has no risk of mobilization, but discharge also means that longevity and pay scale are frozen on the date of discharge. At age 60 the pension would start at their rank and longevity that they held on the date of discharge (their actual years of service) using the pay scale in effect on the date of the discharge (not the pay scale in effect at age 60). If a Reservist wanted zero risk of mobilization (or if they wanted a smaller pension to spite an ex-spouse) then they could choose a discharge. However, choosing “discharge” instead of “retired awaiting pay” means that years of missed pay raises can reduce a pension by 10%-50%. An unsympathetic court could still award the ex-spouse the pension share that the retiree should have elected.

Even when a servicemember elects to “retire awaiting pay”, they won’t know the precise amount of their pension until they turn age 60 and can use that year’s military pay tables. However, the pension amount can be estimated using today’s 2013 pay tables and then making hopeful educated guesses about how military pay will keep up with inflation until age 60.

In this reader’s case the divorce decree splits the pension (50% to each) and the Reserve retirement starts later in 2013 (the current pay table).

The military retirement pension formula is:

Pension = (service multiple) x (pay base).

“Service multiple” comes from the number of years of service or Reserve drill points (two different formulas). “Pay base” is different from “base pay”. It’s the pay amount calculated for the “Final Pay” or “High Three” retirement systems. We’ll come back to that in a few paragraphs.

Let’s start with the easier part of the retirement pay calculation: the service multiple. For a Reserve retirement it’s:

Service multiple = (# points) / 360 * 2.5% .

(The divisor is 360, not 365, because military pay is based on 30-day months. There are 360 days in a year of 12 30-day months.

For this reader’s situation the service multiple is:

5300 points / 360 * 2.5% = 36.806%.

The pay base for “Final Pay” is simple: the highest base pay scale earned on active duty or in the Reserves. That Final Pay number is in the O-6>40 column (maximum longevity) of the 2013 military pay table: $10,736.70/month.

The pension would be:

36.806% x $10,736.70 = $3951/month. The ex-spouse’s half of that would be $1975/month.

If the retiree’s date of initial entry into military service (DIEMS) was 8 September 1980 or later, they would be under the “High Three” retirement system. That requires calculating the average of the highest 36 months of base pay. If the retiree was turning age 60 in October 2013 then their High-Three average base pay (from O-6>40 pay tables of 2010, 2011, 2012, and 2013) would be $10,520.95.

36.806% x $10,520.95 = $3872/month.

Unfortunately, that pension amount may not be the final answer. The USFSPA legislation only affects the retiree’s “disposable retired pay”, which is the pension amount minus authorized deductions. Among the authorized deductions is “amount of retired pay waived in order to receive compensation under Title 38 (Department of Veterans Affairs) of the U.S. Code”. (See Q#10 of the USFSPA FAQ at that link.) In other words, some disabled military retirees have a smaller DoD pension because they waive a portion of it in order to receive that amount from the VA.

Mahalo nui loa to Rob Aeschbach and Jason Hull for correcting my misunderstanding of the VA disability process and helping me check my references. The specific statute is in section 1408(a)(4)(B) and (C) of Title 10 of the U.S. Code and a more specific divorce discussion is at this link.

Here’s a brief example. If a military retiree has a $1000 pension and his divorce decree awards 50% to his ex-spouse, each would receive $500. If the retiree is determined to be eligible for $200 of VA compensation, they waive $200 of their (taxable) DoD pension in order to receive $200 of (untaxed) compensation from the VA. Now their “disposable retired pay” is $800 and the ex-spouse would receive $400: $100 less than they expected. The divorce decree can anticipate this issue by changing the pension payments to the ex-spouse (still limited to a max of 50% by USFSPA legislation) or awarding more funds (alimony) from other marital assets.

If a retired veteran has a disability rating of at least 50%, or combat-related disabilities, or a Chapter 61 disability retirement, then the situation is even more complicated– and far beyond the scope of this post. Seek professional legal advice.

The rules got even more complicated in 2008. Although most Reserve pensions start at age 60, a few Reservists are eligible for a pension that starts earlier. They had to deploy to a combat zone for at least 90 days anytime after 28 January 2008. For every 90 days that they deployed during a fiscal year after that date, the starting age of their pension is 90 days earlier down to as young as age 58. “Luckily” that wasn’t the case in this situation, because the ex-spouse would have to ensure that she filed her application with DFAS before the retiree’s pension began.

Ex-spouses have to “claim” their portion of the retiree’s pension at by filing with DFAS before the pension starts. If the claim isn’t filed soon enough then DFAS will not pay retroactive to the start of the pension. This is controversial and a lawyer may be able to suggest a resolution of missed pension entitlements, but the problem can be avoided by filing the claim before the retiree starts drawing their pension.

Three more issues for this ex-spouse: first you should check whether you’re eligible for Tricare healthcare at age 60, followed by Tricare For Life healthcare at age 65 (second payer to Medicare). Many financial aspects of divorce can be negotiated while other military benefits are set by law. The expert in what’s known as the 20-20-20 rule is “Ask June” at

Next, you’ll want to check your “spousal insurance” paperwork that you negotiated during the divorce. It sounds as if you’re describing the Reserve Component Survivor Benefit Plan, which certainly covered you for the last seven years. If your ex-spouse has been voluntarily paying SBP premiums on your behalf then he can change his mind and cancel the insurance after paying two years of premiums (starting at age 60). If he remarries then he can change the beneficiary to his new spouse, but the wording of the divorce decree may affect that. If you trust that he’s treating your honestly then you’re probably getting the straight story. If you’re not sure then you need to seek a lawyer who understands military divorce, the RCSBP, and Former Spouse Coverage.

Finally, you probably already know that you may be entitled to a portion of your ex-spouse’s Social Security benefits based on his and your earnings records.

I’ll end this post by encouraging military spouses to educate themselves on their benefits.  As Kate Kashman writes over at, the more educated and involved you are then the better you’ll be able to take care of yourself and your family.  When your spouse is working on their military career, they can use your help to make sure that you both understand your pay, allowances, and benefits and use every program you can. When they’re deployed and you’re managing the family finances, you’ll need to know what you’re entitled to and where to find it. If you ever have to deal with divorce like this reader, the day you visit a lawyer is the worst possible time to start a personal cram course on military benefits acronyms.

Related articles:
Reader questions on Reserve retirement Tricare and points
Military Reserve and National Guard retirement calculators
Military insurance: SGLI, VGLI, SBP, and other benefits
Survivor Benefit Plan
The Reserve Component Survivor Benefit Plan
Book review: The Complete Idiot’s Guide to Social Security and Medicare

About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
This entry was posted in Military Life & Family, Military Retirement, Money Management & Personal Finance. Bookmark the permalink.

16 Responses to Military Retirement and Divorce – How Does a Divorce Impact Military Retirement Pay?

  1. Kate Horrell says:

    Great answer, as always. Your knowledge of reserve stuff boggles my mind. I guess you had good incentive to learn how the reserve side works, as well as the active duty side.

    • Doug Nordman says:

      Thanks, Kate! I learned more than I really wanted to know about divorce, but it’s all critical to both divorced spouses’ financial futures.

      My spouse was in the PACOM Reserve unit, where you see at least one case of just about everything from all the services. It was very educational, and I wish I’d paid more attention to the Reserves when I was on active duty. It would have been a much lower-stress path (but perhaps a bit longer) to financial independence.

  2. rameychristy72 says:

    I have a question and a I’ve read the original post leading up to this post! In my divorce degree I was awarded 12% of my husband’s 24% in his Reserve Retirement Points through disposable military retired pay. Meaning this is the portion that he earned prior to our marriage. I receive 12% of it. But I also was awarded 50% of the time period in which we were married from Sept 20001 until May 2010. His total career points were 056666 and during the marriage he earned 1378. But the problem is not only figuring out how much I’ll get in a dollar figure (even though I know it can be different in the end) but also my biggest concern is that my husband has to pay me directly. So, how do I know what to expect and to know if he’s ripping me off or not? That’s my issue. Thanks.

    • Doug Nordman says:

      Thanks for asking the question! Please check your e-mail for a long response from NordsNords at Gmail.

      The short answer is that a lawyer with skills at military divorce needs to look at the applicable documentation from your ex-spouse’s service record. The long(er) answer is that these details could be discussed in a future blog post.

  3. Margarita says:

    Hi. I was married for 16 years and was awarded around 250,000. (At around37%) of my military husbands pay (based on him retiring at a 20 years). If my husband stays in for 30 years, will they stretch that 250,000.00 out to 250,000. At 30 a year retirement or is there another calculation they will use? My divorce papers already have a set amount of money he’s paid annually, with no Claus in there for his promotions or if he retired at a later date, that would indicate I would receive more monies then what is put on the divorce papers. There is a big difference between 250,000. At 20 years as opposed to me continuing to received that set amount awarded to me, for an additional 10 years.

    • Doug Nordman says:

      Margarita, every state has different divorce laws, and the federal law only says that a military pension can be divided as marital property.

      The terms of that division are handled during the divorce agreement. I can’t predict whether promotions or more years of service would boost your payments beyond the divorce agreement. The best advice I can offer is to read through your divorce agreement with a lawyer who understands military pensions and your state’s divorce laws. This post will also remind the lawyer of some of the potential issues.

  4. Barbara Hill Gilmer says:

    Where do I go to find out if I can draw anything from my ex retirement,now that he has died, he died in 2003. I was told by a friend that I could we were married over 20 years and he was in the air force over 20 years

    • Doug Nordman says:

      Good question, Barbara. I’m afraid that you’ll learn there’s nothing, but let me give you some references and contacts.

      The first requirement of the Uniformed Services Former Spouse Protection Act is known as the 20/20/20 rule– not only did you have to be married at least 20 years and your ex-spouse in the military for at least 20 years, but those periods had to overlap by at least 20 years. If that’s the case then you’re eligible for Tricare and for access to military bases (commissary and exchange privileges).

      If your marriage and military career overlapped by at least 15 years (but less than 20) then those benefits are only available for a transition period of a year.

      It seems unlikely that you’re a beneficiary of your ex-spouse’s Survivor Benefit Plan, because I’d hope that the Defense Finance and Accounting Service would have notified you by now. However you may want to check on that by contacting their office (800-321-1080) to see if you’re listed. Here’s a link with more information:

      I’m not an expert on Social Security, but you should contact a local office to see whether (as an ex-spouse) you’ll be able to draw your benefits based on his earnings record.

      Finally, if your ex-spouse died of a service-related condition, it’s possible that you’re eligible for Dependents Indemnity Compensation. That’s also paid by Social Security, so check with their office when you ask about drawing SS on his earnings record.

  5. Melissa says:

    My husband is divorcing me, spent 22 years in the military, 17 of those years we were married. How do I calculate how much of his retirement I will receive, and to make sure I receive the set amount even though he will try to receive more of a disability percentage, so I get very little? That is what he said he would do, so I barely get anything.

    • Doug Nordman says:

      I’m sorry to read about your divorce, Melissa.

      Just like the post says, the best way to handle this situation is to work with a lawyer who understands your state law and military compensation. The Uniformed Services Former Spouse Protection Act only tells the states that a military pension can be divided up during a divorce. The actual amount of the division still depends on state law and on how experienced your lawyer is with military compensation.

      In other words, your lawyer can get at least the percentage of the servicemember’s pension that the state would normally agree to award you. You don’t get a share of the VA compensation because that’s no longer part of “disposable retirement pay”, but you could get other assets or payments to make up for that. The lawyer may also be able to get more for Survivor Benefits Program (which is worth your time to pursue), child support, alimony, real estate, and educational benefits.

      If it’s any consolation, your ex-spouse will be challenged to get even the disability rating that they’ve earned– let alone to receive a higher rating. The VA compensation exams have very stringent criteria that are conservatively applied for the bare minimum in benefits.

      Note that DFAS will send your share directly if you meet the requirements of the 10/10 rule and file with them:

  6. Joy L Taylor says:

    Maybe you can help me. My ex retired in 2003 after 20 years. we were married for 13 of those years and based on the formula used by the court to determine my portion of his retirement , I was to receive 33%. Here’s where it gets strange. When my ex retire, the only form he submitted was the required one, he did not include the divorce decree. He started sending me $93.98 a month as “your share of my retirement”. In 2014 I received a letter form DFAS asking to update all info and to submit the decree. I called DFAS and was told that the ex had not submit the decree and I filled out the form and submitted a copy of the divorce decree. I did begin receiving the correct amount and the spousal support as ordered in the form of a direct deposit instead of from the ex as before. I am taking him back to court on a contempt of failing to obey a court order (or whatever the courts call it) amd my attorney has subpoenaed the military to get copies of his retirement paperwork. It has been 3 months since the court ordered the subpoena and a constant run around by the military retirement system and the legal system and no one knows anything about a subpoena. Who can I talk to about obtaining copies of the ex’s retirement paperwork or who can my attorney talk to that will actually give us a straight answer?
    Sorry about the long comment but we are extremely frustrated.
    Thank you

    • Doug Nordman says:

      Joy, I don’t have the legal knowledge to offer a recommendation on this.

      Perhaps your lawyer could talk with a military JAG, or maybe you could have your ex-spouse provide copies of his electronic Retiree Account Statements.

      • Karen Alexander says:

        What’s a former spouse to do when military member is not locatable? I cannot find out any particulars of my former spouse. Dfas does not share information. Dept of navy has not replied yet. I’ve been patiently waiting and corresponding since 1996. My mental state is being adversely affected by the stalls and lack of fair dealing.

      • Doug Nordman says:

        Karen, the Defense Finance and Accounting System will respond to a state divorce court’s judgment and may set up an allotment from the servicemember’s pay or pension. That depends on the details in the divorce decree. You could apply to DFAS for direct payments under the Uniformed Services Former Spouse Protection Act, and that doesn’t require you to know your spouse’s current status.

        If you need to locate a former spouse, you’d have to search the Internet (and perhaps pay for the data) or hire a private investigator.

  7. Karen Alexander says:

    Dfas hates working with former spouses it’s one delay after another and all anyone can say is hire an attorney.

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